ChargePoint's Path To Profitability Recognized By Analyst, Upgrades Stock To Buy

Zinger Key Points
  • BofA Securities upgrading the company's rating due to the firm's clear route to cash inflection and profitability.
  • Analyst Alex Vrabe suggests that ChargePoint could generate more than $100 million in operating cash by 2025.

Shares of ChargePoint Holdings Inc CHPT climbed in early trading on Tuesday, ahead of its first-quarter earnings release scheduled for Thursday.

The company has “proof of execution” and a clear route to cash inflection and profitability, according to BofA Securities.

The ChargePoint Analyst: Alex Vrabe upgraded the rating for ChargePoint from Neutral to a Buy, while reducing the price target from $15.50 to $14.00.

The ChargePoint Thesis: The company is the leading provider of networked electric vehicle chargers in the U.S., with a market share of around 70%, Vrabe said in the upgrade note.

Check out other analyst stock ratings.

Management’s projection of "a cash inflection" in the fourth quarter of 2024 appears realistic, and ChargePoint could generate operating cash of $19 million in that quarter and more than $100 million in 2025, the analyst stated.

“While we estimate ~$300mm in operating cash burn in 2023/24 ($200mm in CY23), we believe that $295mm in cash plus $105mm in short term notes limits CHPT’s need to tap capital markets to reach free cash generation,” Vrabe further wrote.

He added that the company’s growth outlook “remains a simple correlation to EV sales which we expect will continue despite recent headlines on competition,” especially a deal between Ford and Tesla.

CHPT Price Action: Shares of ChargePoint had risen by 11.7% to $9.49 at the time of publishing Tuesday.

Now Read: Ford Shares Surge As Jefferies Shifts To Buy

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Posted In: Analyst ColorUpgradesPrice TargetAnalyst RatingsMoversTrading IdeasAlex VrabeBofA SecuritiesExpert Ideas
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